Two companies that have been struggling financially in recent years will report more red ink for 2000. In a report to the Securities & Exchange Commission informing the agency that their year-end filings will be late, both Golden Books and Intervisual Books Inc. said they expect to report "substantial losses" for last year.
Intervisual said the higher loss will be mainly due to lower sales to publishers of its packaged materials, which were somewhat offset by increases in self-publishing sales. Sales to foreign publishers have been hurt by the strength of the dollar and Asian economic conditions, especially in Japan. Rights sales will be down significantly from 1999, which Intervisual said was an exceptionally strong year. Higher interest expenses, write-offs of deferred taxes and increases to reserves for inventory write-offs, bad debts and additions to the reserve for returns will also contribute to the higher loss. In 1999 Intervisual's net loss was $947,000.
Golden did not go into details about why it expects to have a large loss for last year, but pointed out that results for 2000 are not comparable to 1999 because of the adoption of "fresh-start accounting" following the company's emergence out of Chapter 11. For the first nine months of the year, Golden had a net loss of $17.8 million on sales of $103.1 million.
Both companies expect to have final figures by the middle of the month.
A third company that asked for an extension for its year-end filing is Audiohighway.com. The Internet-based audio company filed for bankruptcy in January (News, Jan. 22) and told the SEC that because it has only a skeleton staff it needs more time to complete its audit for 2000. The filing notes that Audiohighway "exhausted" its funds in 2000 and is continuing to look for new capital, but acknowledged that it is uncertain if it will be able to continue as a going concern.